Smaller landlords feel the sting of tax changes

The number of landlords with smaller portfolios has decreased, following tax changes in the buy-to-let sector.

Research by Paragon found that the proportion of landlords with 3 to 5 properties down from 26% to 24% at the end of 2017.

This contrasted with rising figures for those with slightly larger portfolios, as landlords with 6 to 20 properties increased from 35% to 39% in Q1 2018.

According to John Heron, managing director of mortgages at Paragon, this “polarisation” in the sector has been largely driven by tax and regulatory changes.

In a separate survey by Aldermore, 25% of landlords said changes to tax relief were their main challenge, while 22% cited increased stamp duty.

Others were mainly concerned with changing pressures in the sector, such as growing pressure on yield (15%), pressure on rent (14%), and increased competition (11%).

Charles McDowell, commercial director of mortgages at Aldermore, said:

“There is no denying the buy-to-let market has taken a bit of a battering, thanks to a multitude of regulatory, underwriting and tax changes.

“Despite the recent changes, many still view buy-to-let as a good investment, with expansion on the horizon, particularly among those who are specialists in this area.”

Talk to us about your property portfolio.

Related Posts

New rules to tackle VAT evasion

Online marketplaces that provide a platform for businesses to sell to UK-based consumers may be held liable by HMRC if those traders are not paying th...

Reduced dividend allowance edges closer

From 6 April 2018, the tax-free allowance on dividends will be reduced from £5,000 to £2,000. Owner-directors have used the dividend allowance to e...